Mass Tech Layoffs Affect H-1B Holders

The biggest tech companies in the United States have been hit with a slew of layoffs in the last couple of weeks. Giants like Twitter, Apple, Uber, Meta, Google, and more have let go of hundreds and even thousands of workers with little to no notice, fueling recent talks of recession and economic downturn. But for one vital Silicon Valley community, the layoffs represent more than the headache of seeking new employment. H-1B visa holders, making up two thirds of the Valley tech workforce, face losing their legal work status and, as a result, their lives in America, on top of their source of income.

The American system of legal immigration is notoriously convoluted, difficult, and expensive to navigate. Nonetheless, immigrants make up a significant portion of the country’s working population, especially in tech. Many have worked to strengthen the tech industry in America with the help, in part, of their H-1B immigrant visas, one of the most common work visas in America.

Impact of Losing an H-1B Position

When a company lays off an employee it has sponsored, the employee’s 60-day timer starts counting down. During this time, the employee can find another company to submit an H-1B petition for them, or change their status from H-1B to another visa, or leave the country. While employers are expected to reimburse employees for the travel expenses of returning to their home country, companies do not have to pay for spouses, kids, or furnishings.

family on a sofaImagine a family of four living in a house in Silicon Valley. The parents both work for US-based tech companies. They came to the US, their young children in tow, to get their Ph.Ds. With a strong academic background, one parent found sponsorship through an H-1B visa, and the spouse, as is often the case, was allowed to work thanks to the H-4 visa. Over the years the family builds strong roots in their community, pays taxes, and buys property. Since the process is so long, particularly for Indians in the US, their children have never lived anywhere else and are focused on their American friends.

Now imagine if the parent with an H-1B was among thousands who lost their jobs during the recent tech company layoffs. Within 60 days, they’d have to scramble to find a new employer willing to sponsor their visa. If successful, the family can resume their lives as usual. If not, both of the parents’ visas are terminated and they, and their children, cannot stay in the US. All of their personal and professional connections are the US, but they would need to leave the country or risk having an immigration violation that would prohibit them from coming back, at times even as a tourist.

Hypothetical Situation Now a Stressful Reality

Brandon MeyerAs Brandon Meyer, the founder and managing partner of Meyer Law Group based in San Francisco, comments, “The layoffs in the tech industry are causing real issues for impacted families on nonimmigrant work visas. We have to remember many have lived in the US for their whole professional career and university before that. Their kids have often spent little time in their `home countries’ and go to American schools. The tech firms are doing what they can to ease the transition, but the business cycle is putting pressure on everyone. It is unfortunate to see such smart, hardworking people be forced to leave the US. EB-5 can often be the solution to this ongoing problem.”

Countless immigrants, with lives, houses, friends, families, and even US-born children have had to face this life-uprooting reality. That is why having a green card and permanent residency is so powerful. Or why having a work permit (EAD) and travel card (AP) tied to an EB-5 investment also works. In both cases you do not need to be sponsored and can work for any company—and can even start your own.

“We have a lot of clients that are in the US on H-1B/L-1A/B visas,” Meyer says. “If they lose their employment, their legal status in the US is terminated within 60 days. The most immediate step for H-1Bs is to find a new sponsoring employer, hopefully within this 60-day period. In most cases, they do not need to go through the lottery again. Options for L-1s are often extremely limited. When they can’t find a position within 60 days, we look at changing their status. If their spouse is on an H-1B, they can change to an H-4 and continue to look for employment. Alternatively, they can shift to a B-1/B-2 status to stay in the country for up to six months at a time. L-1s cannot port to another L-1 employer, are often subject to the H-1B lottery, and may be unable to change to other visa types such as E-1/E-2/E-3, O-1 and/or TN. For many H-1B/L-1A/B holders, the idea of packing up a full family and life in the US in 60 days is not realistic.”

New Pressures on Getting H-1B Visas

Getting an H-1B visa is difficult enough. Despite relying on the immigrant workforce to maintain its international competitiveness, the US does not make it easy to obtain an H-1B visa. International students wishing to transition to an H-1B after completing their American degrees on an F-1 visa have to first compete against the US-born workforce—and then they have to compete against holders of green cards and EADs, whose employers don’t need to complete additional administrative steps before the workers can do their job. In contrast, the cost to the employer to sponsor an F-1 OPT or H-1B visa, including legal fees, is $4,000 to $8,000.

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Many employers refuse even to interview candidates who will need a visa sponsorship. The reason is partly cost, but also the uncertainty. And not getting an interview stops the American dream of many talented and able applicants in its tracks.

Even if an immigrant finds an employer willing to sponsor their H-1B (a likelihood depending largely on the field one plans to enter), after they toss their application into the proverbial hat, there’s a high probability that an H-1B lottery will not come out in their favor. The US allots 86,000 H-1B slots every year, but USCIS receives more than five times that number of applications. Applicants with a master’s degree have somewhat better chances because they can do a second draw, but overall acceptance rates in 2021 were just 23%.

And for those who manage to succeed within the system and obtain the coveted work visa, the road ahead isn’t without bumps of its own. Most H-1Bs are good for three years, with a possibility of renewal for an additional three. After hitting the six-year maximum, however, the worker must leave the US for at least one year and throw themselves through the wringer all over again in order to return.

Investment Avoids the H-1B Process

The process, to put it mildly, is unfair and potentially loses the best and brightest to the difficulties the system unnecessarily imposes on them. For families who have assets to invest, the EB-5 process is much more straightforward. Students on an F-1 visa, or corporate transfers on an L-1 visa, can do a “concurrent adjustment of status” upon investing and then receive an EAD work permit and an AP travel card in 6 to 8 months. With these cards in hand, they can work wherever they choose while waiting for USCIS to process their EB-5 application.

Immigrant workers provide vital and irreplaceable value to US companies, especially in STEM-related fields. It is unfortunate to see such smart, hardworking people be forced to leave the US. These workers are one of the reasons the US remains a leader in tech innovation. Yet, under the H-1B regime, they are forced to suffer through a rigorous and unnecessarily complex process. For those lucky enough to be able to afford the investment requirements of the EB-5 visa, the process is much easier.

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